Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at goldstein.net.

In Erik's call for Future Philanthropy blogs he links to a TED Talk from 2007: Katherine Fulton on You are the future of philanthropy. I've watched the video a couple of times now, and Ms. Fulton makes some great points on several philanthropic trends (and I recommend you also watch it), but it didn't really help me answer the question of what I viewed the future of philanthropy to be.

Ms. Fulton references Warren Buffet, and another of her slides bears the image of Richard Branson, but what really differentiates these modern philanthropic leaders from Rockefeller and Carnegie, or even from the gentlemen who founded the Marine Society? Is it their motivation, is it their philosophy, or is it their tools?

Ms. Fulton describes the philanthropy of 100 years ago as "closed-small-slow-fragmented-short" and contrasts that with the "open-big-fast-connected-long" world of today's philanthropy.

"Closed-small-slow-fragmented-short" may seem a somewhat apt description of old philanthropy from today's perspective, but there's no evidence that it was seen as such in 1905, or that it was meant to be "closed-small-slow-fragmented-short" by intentional design.

What draws that comparison is not any change in the concept of philanthropy, it is all about the tools. 120 years ago, Andrew Carnegie building libraries across America was very open, connected, big, long, and somewhat radical (okay, it probably wasn't "fast," but what was then?). Today his approach might be to distribute iPads to students instead, but his philanthropic ideals would likely be the same.

I guess what I'm saying is, the impulse to philanthropy is as old as society itself, and that the forms it takes always includes both, the "small and informal" (mutual aid to crowd-funding), and the "large and influential" (Carnegie to Gates). What evolves are the methodologies and tools.

There are certainly trends - I've lived through several: money for technical assistance, money for programs only, highly focused outcomes, more data, less data, forcing mergers, encouraging cooperation, and a few others - but those are changes in bureaucracy, not philanthropy.

So, I suppose my predictions for the Future of Philanthropy are as follows:

New developments in technology - particularly communications technology - will continue to drive changes in how nonprofits and donors discover each other and build relationships.

Trends in giving will continue to be driven by "thought leaders" emerging out of the currently dominant business sector (IE: Carnegie's steel then, Gates' high tech now).

Despite the attention given to the "thought leaders" above, the real work of creating social change and improving the lives of ordinary people will always come in the form of peer-to-peer giving and assistance.

On of the key points that should be obvious, but bears repeating, is that Content is King. What you say is more important than the frequency with which you communicate, or even what medium or channel you are using.

And, when it comes to that content, what donors are most interested in is stories. Again, many of us have been harping on this for years, but too many nonprofits have still not heard the message: Your data may help get a signature on a large check, but to get to that point you need to share just one personal story of how your nonprofit has helped one individual.

When it comes to Abila's findings that should come as a wake-up call, the most startling is the how misaligned most organizations are with the preferences of their donors.

For example, while many nonprofits are dividing their donor lists by gift range, and are differentiating their strategies for large versus small donors, only 3% of groups are always dividing and strategizing differently by age group.

Age of donors matters! Each generation has different communications preferences, from what channel (mail, email, social media...), to the frequency, to the message. If you have the same strategy for reaching millennials as you do for their grandparents, one of them (at least) isn't going to be impressed.

As presenters Tad Druart and Rich Dietz pointed out, our donors are consumers as well, and they are used to communications from companies like Amazon or eBay that are highly differentiated and targeted based on dozens of factors. When we, as nonprofits, treat all donors like just another member of the herd, donors are noticing and turning away from us.

Friday, April 24, 2015

Some time back I blogged about LinkedIn's (then new) Board Connect Service as a great new resource for nonprofit organizations. In the couple of years since, LinkedIn has built upon and expanded their vision of "LinkedIn for Good" and their offerings to nonprofits. I have taken part in a couple of free nonprofit technology trainings provided by LinkedIn and have enjoyed meeting their enthusiastic and caring team.

One of the great nonprofit tools they have is being able to search for professionals who are interested in volunteering or board leadership opportunities by their job skills, education, location, industry, and a host of other factors. Related to that, nonprofits can also use LinkedIn's job posting function to advertise for volunteers at 90% discounts.

As great as that is, and as much as I recommend the organizations I work with check that out, that's also the source of a potential problem.

It has recently been pointed out to me that these volunteer listings appear along with regular employment opportunities when LinkedIn members conduct a search.

On the plus side - and I'm sure this is why it was designed this way - it puts your volunteer listings alongside in front of job hunters who have not previously thought about volunteering. It grabs their attention and presents them with an opportunity they might otherwise have missed.

On the down side, for those of us who are nonprofit professionals, and who may be looking for (paid) career opportunities, it has made LinkedIn nearly useless as a job hunting tool. Simply put, the number of volunteer opportunities that come up in any search so greatly outnumber the (real) jobs that weeding through them all is a frustrating mess.

After learning of this problem I did a few test searches, from broad searches to highly filtered narrow ones. Each time I was overwhelmed with volunteer positions. In most of the searches I was finding only a handful of paid jobs for each 100 volunteer listings.

Using their advanced search tools, I was able to choose only jobs for experience levels of "mid-senior," "executive," and "director." While that dramatically cut down the total number of results, it still included volunteer opportunities.

To narrow my search to what should have only been paid opportunities, I searched for "Industry: Nonprofit," "Function: Consulting," and "Location: within 50 miles." Of the 146 results, there were only 4 paid jobs, and they were all listed on the final page of results. Of the four jobs, one was listed as being in Beirut, Lebanon... a little greater than 50 miles from my zip code.

It seems that with all their zeal for helping nonprofit causes, LinkedIn has neglected to take into account that it takes professionals who are dedicated full-time to those causes to make the organizations function.

Two suggestions:

1 - LinkedIn should make it easy to filter out volunteer opportunities. Yes, they do offer the ability to filter listings by salary range, but that is a premium feature to paid members only ($29.99/month), perhaps out of the budget for many nonprofit staff.

2 - LinkedIn could expand their LinkedIn for Good efforts by offering discounts to nonprofits on regular job ads as well. Perhaps not the same 90% they discount for volunteer opportunities, but something close to it. I know there are nonprofits hiring that I'm not seeing in my search results. Price is a factor.

Friday, November 14, 2014

I apologize in advance that today's posting here is going to be more of a rant than a helpful article, but I hope you will sympathize with my frustration. This comes from two articles I read yesterday that left me shaking my head, wondering if the world's gone crazy.

Actually, I very much agreed with the thrust of the article and report, that you need to pay attention to your donors, and be responsive to their questions, before they drop you from their giving, not trying to make up after. The line that got me frustrated was this:

"Service in the non-profit sector is too often relegated to some distant corner of the organization and/or treated as a cost center."

If you've removed your phone number from your website to reduce inquiry calls (a finding of the report), explain why. If it was to save on overhead, say so! Or, just answer the phone, and educate your donors about the true costs of running your organization, and why your overhead is what it is.

But that article was just a minor irritation. What got me angry enough to write this rant was this:

It turns out, however that the Fisher family isn't giving up their naming rights quietly or cheaply. While their original gift in 1973 was for $10 million, the ransom they will receive to release the Philharmonic from the deal will be $15 million (plus other perks).

Patricia Illingworth has summed up the situation perfectly:

"... Philanthropy is understood as the giving (and sometimes volunteering) for the love of humanity... The fact that the family required $15 million (plus other things) in order to relinquish their rights underscores that this is business and not philanthropy..."

The Fisher family received four decades of worldwide recognition, publicity, thanks, and kudos for their investment. Now they're also getting a 50% return on their money.

Not a bad deal for them. But what about the donors to the new hall? Who will be making the $15 million donation that won't produce a single note of music, and won't lay a single coat of paint on the rehabbed building, but will go entirely to the Fishers? Would you like to be the one making that pitch to one of your donors?

And what does that say to all of our potential donors about how our arts organizations (and other nonprofits) are being run? What does it say about how we manage our money or negotiate deals? No wonder donors are curious about our overhead rates and want to keep them low!

It's almost enough to make you want to remove your phone number from your website and stop responding to donors altogether.

Or, maybe, we could stop fearing our donors, stop babying them and trying to protect them from the realities of our world, and stand up to them when they have ridiculous demands that make a joke of philanthropy.

Tuesday, October 28, 2014

If you're not already talking about overhead, you should be, and you will be soon. Overhead, of course, is shorthand for what nonprofits spend on general management and oversight, fundraising, and membership development. In other words, anything that isn't directly mission-related programming.

Seems pretty basic, but there are often fuzzy lines between what we consider "overhead" and what we consider "programming" - a line that is not only fuzzy, but politically charged as more and more donors (individuals as well as foundations and government) are looking at our overhead-to-programming ratio as a means of judging our "worthiness."

Last Friday, I attended Stronger Together, a conference produced in collaboration by CalNonprofits, CompassPoint Nonprofit Services, and Nonprofits' Insurance Alliance of California (NIAC). Among the sessions I attended was The Nonprofit Overhead Challenge: Action Lab for Change, moderated by Jeanne Bell, CEO of CompassPoint, and paneled by Jan Masaoka, CEO of CalNonprofits, Hydeh Ghaffari, Partner, DZH Phillips, and Ann Goggins Gregory, COO of Habitat for Humanity Greater San Francisco. Here are my top three takeaways from the session:

1 - Hydeh Ghaffari: "The organizations showing 6% are playing with the numbers and the ones showing 60% need technical assistance."

Nonprofits have to educate themselves, and their staffs, about what qualifies as program, and what gets lumped in with overhead. Don't be afraid of asking your staff to complete more detailed timecards that accurately track how much time they spend in each program area, and when they are doing "general" or "oversight" work.

Learn what your true ratio is, understand it, and embrace it. You can't use a single rule-of-thumb ("14%!") to determine if your overhead is too high or too low. You need to understand the true cost of running your organization, and be able to defend when spending more on overhead is necessary to achieve growth and deliver on your mission.

2 - Ann Goggins Gregory: "Be willing to walk away from grants and contracts that have egregious reporting requirements and too strict limits on overhead. And share that reason, respectfully, with the funder."

A hard lesson - walking away from money on the table - but as a consultant I can attest to seeing many of my clients nearly ruined by contracts that cost more to administer than they were worth. Once you know what your true overhead costs are, be honest about them with your funders. If you need to subsidize a contract with other donations that cover the overhead, that's entirely fine and your choice, but you do yourself (and all of us) a dis-favor when you cover that up.

Remember, any contract that includes any Federal money (even when passed through your local municipality) has to include at least 10% for overhead. Is that enough? Consider that most service businesses run about 30-35% for their overhead.

3 - Jan Masaoka: This is important because there have been repeated attempts to pass laws saying too much overhead means a loss of nonprofit status.

In several state legislatures there have been moves (some more successful than others) to determine whether to limit tax-exempt status only to those organizations that have a low overhead. Whether or not your state has already discussed this or not, this is not a conversation that is going to go away anytime soon.

We cannot be afraid to talk to our legislators about why this is a bad idea, why overhead ratios are not the ultimate measure of a nonprofit's worthiness, and why ratios differ from nonprofit to nonprofit based on a number of factors. If we fail to act now to educate the public and the politicians, we risk losing our nonprofit status, and with it, our ability to achieve our missions.

Coincidentally, last week another collaboration was also bringing attention to the issue of overhead. GuideStar, BBB Wise Giving Alliance, and Charity Navigator released a public letter as part of their Overhead Myth campaign.

The members of the panel I attended Friday had mixed feelings about this. Many in the sector believe that the uber-focus on overhead is largely a creation of these organizations and their systems of ratings for nonprofits (particularly Charity Navigator). Jan was the most blunt, saying, "It's like the Gap saying 'Clothes don't matter, it's what's on the inside that counts'."

Jan is my former employer and a long-time associate and friend, but I'm a little more moderate in my criticism. I don't believe that they ever meant for overhead to become the single-most important measure of what nonprofits deserve funding. Still, it is undeniable that that is exactly what has happened. A study released today by the BBB Wise Giving Alliance found that "donors care more about how money is spent than results."

I have been in contact with the folks at GuideStar, offering this space for a guest blog from them about the Overhead Myth campaign. Hopefully we can present that soon, and continue this open dialogue.